With Anglo shares closing at their all-time peak of €17.53, Friday 1 June 2007 was apparently a happy day for Anglo Irish, its shareholders and its management.

With around 756m shares in issue Anglo was worth a remarkable €13bn, making the small lender the third most valuable stock market-listed company in Ireland. Between them, Anglo Irish managers owned a huge 10% of the bank, valued at a handsome €1.3bn.

A few weeks earlier, on 10 May, the bank issued first-half earnings that showed after-profits had surged to €462m from €289m a year earlier. The previous month, the bank had raised €542m to help fund the extraordinary growth of its loan book, even as the credit crunch, then still known as the US sub-prime crisis, was heading to Europe.

"Your board looks forward to delivering sustained above-market performance through 2007 and beyond," then chairman Seán FitzPatrick said.

But around the same time other events, hidden from public scrutiny but known by senior bank executives and the Financial Regulator, were unfolding at the bank: people were taking huge speculative punts that Anglo's shares would continue to surge. In just a few months, these simple speculative bets, known as Contracts for Difference (CFDs), were to sour spectacularly and, in just a few months, helped contribute to the enveloping crisis for the bank, the economy, and the government.

The events from summer 2007 will be scrutinised by investors who held hundreds of millions of euros in conventional investments in Anglo. Experts say it's likely the big institutional investors will be obliged to sue to protect the interests of their clients and will expose the state, as the new owner of Anglo, to potential claims for huge damages.

The investors will follow the unfolding revelations about the so-called 'Golden Circle' of 10 investors who borrowed money from Anglo to soak up, hidden from public scrutiny, about 75m Anglo shares last July in order to stop a collapse in the Anglo share price. Most aggrieved will likely be any big investors who bought shares after the July transaction in the belief that stability had returned to the bank.

The investors will scrutinise every stock market announcement made by Anglo in the last 20 months.

In the summer of 2007, there were tell-tale signs that speculators were running significant CFD bets on Anglo shares. To hedge their risks, the London financial firms that were on the other side of the CFDs bets bought huge quantities of Anglo shares.

In a stock market filing on 4 May 2007, Credit Suisse Securities and Credit Suisse International said they owned 40.5m shares or 5.34% of Anglo Irish share capital. At €17.20 per share, the Credit Suisse stake, which would likely account for only a part of the CFD bets wagered on Anglo, were worth €698m. By mid-summer, Anglo shares had fallen to €14.98 as Northern Rock, the British bank that had also benefited from the property boom came under pressure. But even then Anglo was valued at €11.32bn.

Despite the share price falls, it appears the large CFD speculators were continuing to bet huge sums on Anglo Irish. On 3 July, Credit Suisse said it had increased its shareholding in Anglo Irish to 47m shares, or 6.2% of the bank, valuing its holding at €650m.

Then on 31 July 2007, a significant new player showed its hand: Bear Stearns International Trading told the market that about six weeks earlier, on 14 June, it had increased its shareholding in Anglo Irish from a small 2.7m shares to 28.7m, or 3.8% of the bank.

Between them, Credit Suisse and Bear Stearns held 9% of Anglo shares, raising speculation that a single investor could hold a huge CFD position in the bank.

By late summer newspapers were reporting that that single investor, Seán Quinn, could through CFDs account indirectly account for as much as 11% of Anglo.

In September Anglo shares would start to fall. In mid-September, Northern Rock, unable to raise funds on the interbank market, was bailed out by the Bank of England, and Irish bank shares dropped faster on a single day than other bank shares in the world.

But then Anglo chief executive David Drumm later told a London banking conference that his bank planned to double its profit to €2.4bn by 2012.

On 18 October, Credit Suisse said it had increased its stake in Anglo since September to 52.5m shares or 6.95% of the bank.

Even as the banking crisis deepened that autumn, it appears that Quinn and probably other speculators escalated their Anglo CFD bets. Even as brokers at Merrill Lynch placed Anglo and HBOS on its list of "least preferred" banks in Europe, Credit Suisse on 26 October said it had increased its Anglo holding to 52.9m shares, or 7% of the bank. Still, Anglo shares plummeted that month from €12.70 to €11.47. On 28 November Anglo announced after-tax profit for the year to the end of September had climbed to €998m from €657m. Its customer deposits, the bank said, had increased 46%, or by €16.7bn.

Anglo shares ended 2007 at €10.94, valuing the bank at €8.27bn.

A new year and the stream of Anglo's ownership announcements continued. Credit Suisse said on 25 January it held 53.6m shares, or 7% of the bank, suggesting that Seán Quinn, as a significant holder of CFDs, had held his nerve. But other institutional shareholders, including Bank of Ireland Asset Management (BIAM) were reducing their stakes. BIAM sold its shares at around €9.41 each, reducing its stake to 2% from 3%.

On 6 March Anglo Irish was still insisting that everything was working out well.

But Anglo's shares were about to be hit a tsunami. Drumm blamed mysterious international short sellers for Anglo's share slide. On 13 March analysts at Merrill Lynch warned that Anglo was seriously at risk from falling commercial property values.

Ahead of the St Patrick's Day weekend, Anglo shares closed at €8.19 each. By the end of Monday 17 March, they were down to €6.95.

The Financial Regulator here appeared to take its lead from the bank: it contacted stockbrokers and asked for transaction records to discover if they had manipulated Anglo shares by spreading false rumours.

Major institutional investors apparently had decided that Anglo's share price falls were overdone. With the price at around €8.80, the giant Invesco on 19 March said it increased its stake by buying almost 3m shares, increasing its holding to 53.25m, or 7% of the bank. In late April The Sunday Independent reported that unnamed Anglo Irish clients planned a €500m "revenge fund" to buy Anglo Irish shares.

On 5 June institutional investor Invesco cut its holding to 43.4m shares, or 5.7%, but later that month increased the holding again to 6.12%. On 26 June Janus, the big US institutional shareholder, increased its stake from 24.3m shares to 31.9m shares, or 4.2%.

On 15 July with the share price closing at €4.08, Seán Quinn disclosed that – after sustaining about €900m in losses on his CFD bets – he and his family members had decided to buy a 15% stake, at an estimated €464m. The news appeared to give comfort to Anglo's big institutional stakeholders.

Meanwhile, it emerged later that the bank had also facilitated a group of 10 to buy another 10% of the bank. On 2 August with the share price at around €5.02, Janus announced it had increased its holding to 54m shares, or 7.1% of the bank. Meanwhile, the banking crisis was deepening. Anglo shares plunged on Monday 29 September to €2.90. That evening the government, after crisis talks in Government Buildings, agreed to guarantee all the deposits and bond debt, amounting to about €440bn, of the Irish banks.

Invesco continued to buy shares. On 9 October it told the market it had increased its holding from 53.3m shares to 54.2m, representing 7.14% of the bank.

On 24 October, when Seán Quinn was personally fined €200,000 and his Quinn Insurance Group paid €3.25m in other fines after it emerged he had dipped into the regulated insurance companies to help pay for his Anglo shares purchases in July, Anglo's shares had fallen to €1.85 each.

On 2 December Anglo Irish Bank raised €1.5bn from markets, thanks to the government guarantee. In early December the share price fell further to €0.94. As the shares fell, institutional shareholders had to sell. On 16 December Invesco said it had decided to sell its holding down to 52.2m shares, or 6.8% of the bank.

When Seán FitzPatrick resigned on 18 December, Anglo shares had slumped to just €0.32. FitzPatrick had hidden as much as €122m in personal loans from the external regulator, Ernst & Young, over a period of eight years. Shareholders had been wiped out.

On 16 January, as the state announced the bank's nationalisation, Anglo shares traded at just under €0.22. At its last trade, Anglo Irish Bank, worth €13.2bn less than 20 months earlier, was nominally worth just €160m.